President Woos GOP to Seek Broad Deal

President Barack Obama stepped up his wooing of rank-and-file Republican lawmakers Wednesday, hosting a dozen senators at a dinner at a Washington restaurant and setting a visit to the Capitol in hopes of reigniting talks on a broad budget deal.

The efforts mark his most aggressive outreach to lawmakers in years and show Mr. Obama is trying to build his own coalition in Congress at a time when his past negotiating partners in the GOP leadership are under renewed pressure to accommodate the party's conservative base.

Mr. Obama phoned a number of senators not in leadership positions over the weekend to gauge support for what has come to be known as a grand bargain on deficit reduction and other fiscal issues. One hurdle: Sharply different views on taxes. Mr. Obama has insisted that tax increases be part of any deal to rein in deficits, while many Republicans are open to tax increases only as part of a revenue-neutral broad reform of the tax code, in which tax rates would be reduced.

"The heart of the discussion tonight was, 'How do we get there? How do we get people to come together and really effect the reforms?' " said Sen. John Hoeven (R., N.D.), one of the dinner attendees.

Mr. Hoeven said he saw the opportunity to reach a grand-bargain-style deal as the House and Senate work on their budgets for the next fiscal year and lawmakers face a May deadline for raising the federal borrowing limit. There is "a recognition we really need to do this in the next four- to five-month window. The key is to stay in this intense dialogue," Mr. Hoeven said.

The dinner topics included the mandatory spending cuts known as the sequester, the continuing budget resolution passed Wednesday by the House to extend the government's funding past March 27, energy and an overhaul of the immigration system, Mr. Hoeven said.

"The real focus was the debt and the deficit and how we come up with the kind of bipartisan reforms, tax reform and entitlement reform, that preserves and protects Social Security and Medicare, but that also enables us to deal with the debt and the deficit on a long-term basis," Mr. Hoeven added.

Sen. Lindsey Graham (R., S.C.), speaking before he attended the event, said that the president asked him to organize the dinner at the Jefferson Hotel and that he believed Mr. Obama was looking to start a substantive discussion.

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The White House is actively courting Mr. Graham because he has said he would be open to raising tax revenue as part of a larger deal that also would retool entitlement programs.

A senior administration official said that "the president greatly enjoyed the dinner and had a good exchange of ideas with the senators." The White House said Mr. Obama paid for the meal from his own pocket, a move that, along with the neutral venue, seemed designed to show the president was reaching out.

Some Republicans remained doubtful that Mr. Obama can strike a deal that would shore up Medicare, Social Security and other entitlement programs, reduce deficits and potentially overhaul the tax code. Some went so far as to dismiss the dinner as political theater.

In addition to the dinner, the president has asked to address Republican and Democratic caucuses in the House and Senate next week. And in recent weeks he has stepped up contacts with business leaders, who could be important allies in maintaining momentum in the budget talks, should they begin in earnest.

The overtures mark a departure for a president who has been criticized for shunning lawmakers, choosing instead to socialize and play golf with a small circle of friends and aides.

One of the dinner invitees, Sen. John McCain (R., Ariz.), said in an interview beforehand that Mr. Obama showed little appetite for direct talks with lawmakers in his first term, but that his stance had shifted lately. "Whether that translates into action, I'm not sure," he said. "I want to work with the guy."

One barrier is the high level of mutual distrust. Rare is the day in Washington when the two parties aren't blaming one another for gridlock.

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On the day President Obama invited a group of Republican Senators to a private dinner, Sen. John McCain tells WSJ's Jerry Seib that such overtures are being "well received" and are a sign that the president "now is interested in outreach and dialogue."

Wednesday brought fresh examples: The Democratic National Committee launched a website blaming Republicans for what it said were hardships imposed by the automatic spending cuts known as the sequester, while House Speaker John Boehner (R., Ohio) chided the administration for canceling tours of the White House due to the sequester cuts.

Sen. John Thune (R., S.D.), the Senate's No. 3 leader, wasn't invited to the dinner, but was more welcoming. "This seems to be a more general outreach than just trying to pick off a couple of Republican senators," he said. "So, hopefully, this will be more meaningful."

Even some Democrats are doubtful that Mr. Obama's latest efforts will bear fruit. Senate Democrats believe the White House had far more leverage at the end of 2012, when Republicans were eager to avoid across-the-board tax increases under what was called the fiscal cliff.

Mr. Obama hosted several gatherings with chief executives to seek input as he tried to reach a budget deal at the end of the year. After he gave a speech last week to CEOs at a Washington hotel, he lingered for nearly an hour for private discussions with the corporate leaders, moving table to table, said someone who was at the gathering.

"The president and his aides realize they need as many allies as they can get for the four years ahead," said one executive who has been in the thick of the recent White House outreach campaign.

Recent calls hosted by Obama advisers Valerie Jarrett and Gene Sperling have focused on concerns about the sequester and perceived sticking points in moving forward on an immigration overhaul, according to call participants.The most recent call was on Friday, the day the automatic budget cuts began. Several people who have been on the calls say the White House hasn't pushed business leaders to lobby Congress on the White House's behalf.An important question is whether the two sides can reach an understanding on how to use the revenue that a tax-code rewrite could generate. Generally, Republicans want to use it to lower tax rates while Democrats want to use it to forestall further spending cuts.

The White House also plans to send first lady Michelle Obama and an array of top White House aides to talk next week to a Business Roundtable gathering of about 60 CEOs.

Tax reform is a top priority for many Republicans, making it a potential bargaining chip as Mr. Obama and lawmakers decide whether they can sweep several budget questions into one set of talks.

Those negotiations would include discretionary spending restraints, long-term entitlement reforms and "a process to get to pro-growth tax reform," said Sen. Rob Portman (R., Ohio).

Rep. Chris Van Hollen (D., Md.), the top Democrat on the House Budget Committee, said recently some tax breaks could be eliminated as part of a deal to soften the effects of the sequester, which Democrats want, without undermining the longer-term goal of a tax-code overhaul.

The GOP goal of lowering rates could become "part of the negotiation" over a tax rewrite, he added.

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